The Ripple vs SEC case has been a hot topic in the crypto realm. Crypto traders have been awaiting the final verdict. The XRP community accuses the judge of delaying the settlement case. However, SEC lawyer Marc Fagel says that the case is keeping pace with the schedule.
The prolonged case has created tension and frustration among XRP traders. In addition, the legal uncertainty has taken a toll on investors, and they are keenly looking forward to the finale. In this article, we will go through the major happenings of the Ripple vs SEC case and whether it has affected or opened the doors for digital assets and crypto traders.
What is the SEC vs Ripple Case About?
SEC vs Ripple is an ongoing case in the United States Southern District Court of New York. This case was started in 2020, when the Securities and Exchange Commission (SEC) alleged that Ripple, a blockchain-based network that uses XRP, was conducting an $1.3 billion unregistered offering by selling XRP, in violation of securities laws.
SEC Vs Ripple Case: What Has Unfolded So Far?
The SEC vs Ripple case has caused a ripple effect in the cryptocurrency sector. Let’s look at the summary of the events to date.
- SEC filed a lawsuit against Larsen and Bradely Garlinghouse, Executive Chairman and CEO of Ripple, respectively.
- Alleged that Ripple has raised over $1.3 billion through an unregistered securities offering, which also involved the sale of XRP.
- According to the reports by the SEC, Ripple has been securing funding by selling XRP since 2013 without any registration, which violates the federal securities laws.
- It also said that EC and CEO sold $600 million worth of XRP.
- SEC alleges that the XRP was distributed in exchange for labour and markets, committing additional violations.
- The company has also failed to submit documentation that provides information about the financial transactions.
Ripple’s Small Win
- In July 2023, Judge Analusa Torres ruled that XRP (and all cryptocurrencies) are not a security. It only becomes a security when sold to institutional investors.
- Even when Ripple had a small win, the judge’s ruling confirmed that it sold XRP to institutions that violated the securities laws.
SEC’s Additional Appeal
- In October 2024, the SEC filed an appeal overruling Judge Torres’ order.
- However, on January 15, 2025, the SEC argued that the judge’s ruling was wrong.
- The agency said that XRP distributed as employee remuneration and for business deals should be considered as security.
- As a response, Ripple has requested the court to extend the time to April 12, 2025, to file a response.
Additional Twists in the Case
- In March, Brad Garlinghouse (Ripple CEO) announced that the SEC was going to drop the appeal against the company.
- After the announcement, the XRP rates went up 14%.
- Ripple Labs said it would pay a fine of $125 million, and now the SEC has reached a settlement for just $50 million to end the dispute.
- The $75 million would be returned as escrow.
The Official Confirmation
- The official confirmation of the suspension of the case came in April. The document indicated that it needs approval from the SEC commissioners.
- A month after the settlement, SEC Commissioner Caroline Crenshaw condemned the agency’s settlement with Ripple.
- Crenshaw also said that the settlement was unfavourable to the investors and markets.
Judge Rejects Ripple-SEC Settlement
- One week after the SEC commissioner’s comment about the settlement, a federal judge rejected the joint appeal for settlement from Ripple and the SEC.
- The rejection was due to citing a few procedural errors in filing the settlement.
With the legal battle and the settlement, Ripple said that the case was delayed by Judge Analisa Torres. However, the former SEC lawyer Marc Gael answered that there was no delay in the process and everything was proceeding at its own pace. He also stated that Judge Torres was no longer involved in the case.
“Nobody is holding up the case. Not the judge… There is nothing for her to decide,” Fagel posted on X (Twitter).
As of now, the case has been moved from court to administration. Fagel also explained that the delay is a normal part of the SEC, and they need to complete some routine tasks to close the settlement within one or two months.
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What can be the Reason for the SEC’s Stance on Ripple?
Since Donald Trump’s inauguration as the 47th president of the United States, which took place on January 20, 2025, the crypto policies have changed altogether. Trump took measures to strengthen the US’s position in Bitcoin mining and stockpiling. He also replaced Gary Gensler, known for his strict actions against crypto firms’ violations, with Mark Uyeda, who held the position of Acting Chairman. He changed the existing regulation and created more balanced and clearer guidelines for digital assets.
With the case and the settlement being dragged out for quite some time, XRP users are waiting for the end. Next, we have to see whether such rulings and upcoming policies on digital assets will affect the cases involving Coinbase and Binance.
